Panera Bread vs. Starbucks? A Contrast In Customer Experiences!

As has probably been apparent in my recent posts I’ve been focusing on the little things in customer service lately (e.g., recent posts such as “It’s the Little Things That Count in Customer Service” and “An Now for a Story About Very Poor Customer Service”).

Last week I found another noteworthy distinctive contrast.

I had the opportunity to meet with a couple of business colleagues to build a deeper relationship on two separate occasions. One I met at a Starbucks and another at Panera Bread in our local area.

Not being a coffee drinker I have no particular affinity for Starbucks other than its a nice casual public place to meet to have a light business discussion and there are enough locations around that its usually a mutually convenient place to meet.

Panera Bread is similar to Starbuck’s in the context of being a nice, clean, comfortable place for a light business meeting with two important contrasts.

One is obvious. Panera is a more comprehensive restaurant with soups and sandwiches, breakfast danish, etc. whereas Starbucks offers coffee and other related beverages and isn’t particularly known for its food options.

The other important distinction between the two is that Panera Bread offers unlimited free, no questions asked, WiFi internet connection. Theoretically one could set up camp in a booth at Panera Bread with a laptop and mobile phone creating a pseudo virtual office. Some of my colleagues have done this, and some do this regularly. A colleague of mine who works in human resources for the Panera Bread tells me that unless the restaurant is extremely busy during standard meal times, no one would think twice of allowing a person, who has not purchased even a soft drink to stay and operate a virtual booth office all day long.

I presume the same could be done at a Starbucks but the biggest difference is Starbucks requires registration through an AT&T mobile account to get an internet connection. Registering a Starbucks card gets you two-free hours of internet time and using the card to purchase something at least once every 30-days gives you another two-free hours. AT&T does offer an unlimited option for a fee.

I understand Starbucks position that it wants to be able to comfortably accommodate customers consistently throughout the day and not have seats taken up by non-paying customers. I would probably feel the same way. I also know that most Starbucks seating areas are significantly smaller and more limited in the number of patrons they can accommodate than Panera Bread.

Panera Bread, on the other hand, has made a corporate decision to build a deep relationship with its potential customers providing them with a perk that has the opportunity to build long-term loyalty. The thought process here is that if the patron is in the restaurant for a long period they have to eat or drink something eventually. Plus they will hold meetings with colleagues who will buy foot and drinks as well.

I am trying not to make a value judgment on either approach as I understand the business model, marketing strategies and limitations of each. I just think its important to point out the distinctions between the two approaches and use it as a point of discussion regarding the pros and cons of each to learn how we can apply the lessons to our own businesses.

What are your thoughts? (If you needed a virtual office with internet access outside of your main office are you a big enough coffee drinker and a fan of Starbucks to go through the card registration process at a Starbucks? Or, would you be more like me to want the simplicity of Panera Bread’s approach to be able to just sit down, open the laptop, connect and get to work?)

Though some Panera Breads may offer unlimited access to the internet, I often find the connection to be much more accommodating at Starbucks because there are usually less connected to the wireless at any given Starbucks. Also, during peak hours at my local Panera, patrons are limited to just 2 hours of connectivity before the server politely kicks you offline. I have spoken with the manager of my local Panera and he has told me that he had to put these limitations on the wireless there because of the “campers” that you mentioned in your post.

Shannon,
Thanks for stopping by and comments. I’m sure band width does become an issue at locations and it is something store managers have to monitor. Its a delicate balance. I’ve never been in either Panera or Starbucks for more than 90-minutes at a time. I only use it to kill time while I’m in between appointments and usually will get a snack or lunch while I’m there. Thanks, again for adding to the conversation.

Buhamed,
Thank you for stopping by my blog and leaving your comment.
You are absolutely right, customers always demand more, and it is the operators of the business to fulfill those demands or lose those customers. It’s the way business has always been.

A business operator has two choices,
1) be bold, be an innovator and beat the competition to “the next big thing” – its about market differentiation.
2) be like the rest of the herd and get whatever business comes to you just because you are out there in the market place and have locations or access that people stumble upon.

Do you want your business to be recognized as something/somewhere special, or just one of the herd.

To be something special and to differentiate in a crowded marketplace that keeps getting more crowded, it takes an investment.

Panera has chosen to make that investment in this manner and it has, I believe separated itself from Starbuck’s in this sense.

Instead of competing with Starbuck’s in the coffee realm it has chosen to fight the battle on the atmosphere and amenities front to attract customers.

There is a great Business Strategy Model I learned from Alan Weiss, The Million Dollar Consultant, that shows how companies have to choose between being “Competitive, Distinct or Breakthrough” in three different categories “Products, Services and Relationships” and that it is too expensive to be “Breakthrough” in all 3 areas and usually not necessary.

So, pick one and go for it, then keep innovating to stay ahead of the curve because your “Breakthrough” product, service or relationship, will soon be copied by someone else, dragging you down the scale to competitive and the cycle starts over if you are in the game for the long haul.

Agree?

What is your business and what breakthrough products, services or relationship offerings do you have?

I am an overnight baker at a Panera Bread cafe. It was impressed upon us that people are not customers, they are guests. Even for the short time that I spend with guests in the building, I’ve learned many names and made connections with a number of them. That’s one thing we pride ourselves on. I’ve had a few people tell me that they feel like family when they walk through the door. I think that’s where business starts; with one on one interactions and connections with people. If you treat your customers like family then they will continue to visit. From the free wifi to the personal connections and getting to a first name (or Mr./Mrs. out of respect for elders) basis with the guests, you are guaranteeing repeat business. However, I am a little bias.

The time an overnight baker gets to spend socializing with guests depends on a number of factors. The first being the size of the bake. Of course, the smaller the bake, the quicker a baker can get ahead of schedule and have time to visit. Another is how fast the baker is at the prep portion of the night, which is the first two hours of the shift. The baker’s shift is usually 8pm to 6am. Not to sound braggadocios, but it’s not a problem for me to get to begin working as late as 8:45 and be on schedule by 10:00. Of course, this varies on how I feel and if I’m well rested. Also, in the morning when guests being arriving, there is an opportunity for one on one interaction. There is always an opportunity to make time for guests if the baker chooses to do so. I tend to be more of a social person than others; it’s not uncommon for me to strike up a conversation with a stranger; so I try to make as much time as I can to interact with managers, associates, and guests while still providing a quality product.

I don’t think that your second question is as simple as one answer. And of course, I cannot speak for all cafe’s, but in mine, it’s a mixture of employees’ and guests’ attitudes. In business, you will always have the customers who won’t be satisfied by anything you do; they will always have a complaint, but in my cafe, I rarely see a guest who is difficult to deal with. Maybe we just got really lucky in hiring and location, but the associates just seem to genuinely care that the cafe does well, and that guests are pleased with their service and visit. As for bakers, we work by ourselves with no direct supervisor over us. We have a time line and regulations to follow, but we don’t have someone looking over our shoulder making sure we follow them. I think the job itself weeds out those who care about the product and the work they do from those who don’t. Panera Bread has very high standards. Bakers go through training that lasts six to eight weeks. During that time we learn what is expected of us. If a baker does not meet those standards and provide a quality product, they will not last long. So, in essence, I suppose the job attracts people who do take pride in their work.

George,
Thank you for stopping by and commenting. Your first hand employee experience tells the whole story. I felt a lot of pride coming through in your post, both personal pride and pride in the company you work for. I think that’s important and it comes from the tone that is set from the very first experience an employee has with their new company.

I was wondering how much time an ‘overnight baker’ gets to spend on the floor getting to know the “guests,” as it seems as though the schedules would not be compatible?

I continue to be amazed that of my 110 blog posts between the fall of 2009 and today, this post still is the most visited and most commented.

People are passionate about Panera, and for you guys that’s a great thing.

So, let me ask you this, a lot of organizations impress upon their people that their customers are important, what does Panera do that makes it stick and makes it work? What is it that allows Panera employees such as yourself to keep the focus, the motivation, the desire to follow through and maintain consistency with that approach?

Hi i see your point in why you may think that Panera is better, however since July 2010 Starbucks offers free WIfi. Also I work for the company and before I started working for the company I would definitely choose Panera over Starbucks anytime. They do have fireplaces and the employees there have assigned cleaning areas. That helps keep the cafe clean. However if an individual were a coffee drinker like myself, I would definitely choose Starbucks. They offer a very peaceful atomsphere that continues to grow.